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Urban investors still prefer ULIPS over stock markets

Urban investors still prefer ULIPS over stock markets
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First Published: Tue, Jul 24 2007. 05 29 PM IST
Updated: Tue, Jul 24 2007. 05 29 PM IST
New Delhi: There are opposing indicators marking the investment preferences of rural and urban investors. Despite booming stock markets, the average urban and metro investor is more inclined to park his savings in equity- linked insurance schemes (ELIS) whereas the rural investor prefers fixed deposit schemes for savings over other savings instruments, including stock markets.
This was the conclusion of an Assocham survey -- “Investment still traditional across segments and stock market not the first choice”-- where more than 1028 investors across the rural-urban divide participated. The profile of respondents was varied with businessmen, professionals, salaried personnel and agriculturists making up the group.
Profile of respondents
* 202 people from rural areas, 373 from urban centres and 453 from metros were surveyed.
* Occupation-wise, 220 people were chosen from the business section while 273 were professionals, 382 represented the salaried class and the balance 153 were agriculturists.
Findings
*36.33% of rural respondents were more inclined towards investing in fixed deposits (36.33%), while 24.81% of the urban and 21.86% of the metro segments chose equity-linked insurance schemes over other investment tools.
*Despite the stock market boom, most respondents opted for traditional mode of investment like fixed deposits. Even professionals and businessmen steered clear of the stock market: 24.9% opted for fixed deposits, 21.3% for equity-linked insurance schemes, 15.95% for mutual funds, 15.08% for real estate, 12.84% for the stock market, 7.88% for gold & silver and 2.04% invested in other streams.
*The survey found more variety across diverse occupations. 25% businessmen felt equity-linked insurance schemes were most fruitful in reaping high returns with insurance cover while 23.08% professionals found mutual funds playing that role amongst different investment instruments through portfolio mix.
* 32.72% salaried people and 35.29% agriculturists chose tool-fixed deposits as their most preferred investment tool for they wanted to ensure that their hard-earned money was going into the right investment avenues which involved the lowest levels of risk and fixed returns.
Conclusion
* Fixed deposits are the most popular instrument of investment (36%)
* Next in order of preference was real estate (17.25%)
* Followed by equity-linked insurance schemes (14.82%)
* More specifically, out of 32 rural businessmen, 34.37% showed inclination to invest in fixed deposits, 18.75% in equity-linked insurance schemes, 12.5% each in gold, silver and real estate, 9.37% in mutual funds and 6.25% in stocks and 6.25% in others.
* Among the 43 professionals polled in the internal survey in the rural centres, it was real estate that was found to be the most favoured investment choice (23.25%), followed by fixed deposits (20.93%); mutual funds (16.28%), equity-linked insurance schemes (13.95%), stock market (11.63%), gold & silver (11.63%) and others (2.33%).
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First Published: Tue, Jul 24 2007. 05 29 PM IST